According to Joe Cortright, a slowing pace of rent inflation in most large cities in the United States, combined with decreasing rents in many cities, shows how adding supply can help balance the market.
"Today there’s growing evidence that in rental markets across the nation that supply is catching up with demand, and that rent hikes are moderating everywhere," writes Joe Cortright. In fact, rents are falling in a surprising number of cities.
Cortright crunches the latest data from Zillow, which tracks monthly changes in multifamily rents. After comparing the 12-month change between April 2016 and April 2017 with the change in rents from April 2015 to April 2016 reveals a surprising story:
First, the most striking finding: Rental inflation was lower in the past 12 months in 48 of the 50 largest metro markets. Only in Hartford and Cincinnati did rents increase more in the past 12 months than in the period between April 2015 and April 2016.
Second, in 20 of the top 50 markets, rents actually declined in the past 12 months. Year-over-year, rents dropped in San Francisco, New York, Austin and Miami.
Those findings precede a daring prediction from Cortright: it's possible, perhaps even likely, that rental inflation could soften further, because even more housing units are coming on line in the next year [pdf] or two.
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